My key research question is 'What was the cause and effect of the Korean Financial Crisis in 1997?' This question binds the project all together by explaining the cause and effects in various point of views. Even though the Korean Financial Crisis occurred approximately twelve years ago, it is still a hot issue among people who studies economy. I, myself was also very interested in this topic as it was mentioned very often in newspaper, and broadcasting news. Since the topic itself is very hard and complex, I tried to break it down in to many sequences in genre 1, so that the reader can easily interpret what really happened. Through genre 2 and 3, the topic is discussed in Bank's and an ordinary citizen's perspective so it is much easier to comprehend. This question is not necessarily important to me, but it is a very interesting topic to discuss.
Genre Number 1: Research Paper
Genre #1 is a research paper. This genre helped me the most to know my answer to the key question, because it was a research paper. Through researching, I found new facts and information about the Korean Financial Crisis. The research paper also helped me to understand what caused the crisis and the effects.
During the late 20th century, Asian countries have shown one of the tremendous growths rate in the world until 1997. Hong Kong, Singapore, Indonesia, South Korea were one of the major nations going through rapid economic growth. However, in 1997, these countries faced the most severe financial crisis which halted their economic growth. The crisis is known as the Asian Financial Crisis and also, “IMF Crisis” to majority of South Koreans. The crisis was truly unforgettable for the commoners, causing hardship maintaining their economic status. It has left painful scars in Koreans' memory. Nonetheless, the recession didn't continue for a long time. Although the South Korea's economy was severely damaged from excessive investments, South Korea had recovered dramatically fast through tough works done by the government and citizens.
So, what exactly is the Korean Financial Crisis? Right before the Korean Financial Crisis, economic growth in South Korea had continued for a long time, indicating that Korea will be the major power in East Asia, following the path of Japan. The annual growth for the first half of 1990s was 7.7%, exceeding the average of other nations. (Cavalio The Global Observer) Nonetheless, the little, mere mistakes that were made by the sectors have led the whole country go in to economic recession. Despite of many assumptions made about the cause of financial crisis in Korea, excessive investment is the most popular theory between experts. South Korea's highly leveraged firms and citizens were highly anticipating the success of the economy. (Mc Leod and Garnaut 66) They were too optimistic. The statistics were showing good results and foreshadowing further development in Korea.
The ratio of investment to saving was higher than most of the other countries out of East Asia.(Mc Leod and Garnaut 66) While the investment ratio was high, the sudden halt of growth greatly impacted the citizens, firms and government. (Mc Leod and Garnaut 66) All the money and capitals that were invested in certain sectors, stocks and funds were starting their downfall. The vast money had vanished in a second. All the money that companies and government were providing for the investments were mostly from loans. (Cavalio The Global Observer) The sudden halt of growth resulted in failure of investments and increasing liabilities. South Korea suddenly became the top country with the most debt in such a short time of period. The top thirty companies were bankrupt and this led to a much more serious problem. Observing the situation of South Korea, foreign banks and funds were now requiring for the money that they have lent to them. South Korea-lack of dollars-requested IMF (International Monetary Fund) for a help to rescue them from the high debt. This was basically what happened during 1997 to 1998.
The effects were severe. IMF had lent South Korea, approximately $55 billion. Now that South Korea has borrowed money from IMF, they had to pay back the debt. The stages paying back the debts and liability showed the true Korean spirit which shocked the world. There were 34.9 million citizens participated in collecting golds. (Kim Seoul Newspaper) After they collected the golds, they exported to other countries and received vast amount of dollars. Furthermore, the government promoted the 'Anabada', which means that citizens should use the product with care, then share and exchange the product with other people, and finally recycle the product. It was a promotion of recycling and make people not to waste money. People also tried to buy their own nation’s products which helped the companies in Korea to earn profits. (Kim Seoul Newspaper). The government also did a hard work trying to provide jobs as many as possible. By creating jobs, it was an opportunity for the people who lost their jobs when the companies were bankrupt. The government also inhibited systems and programs that halted companies from autonomous business.
The scars that the financial crisis has left behind to the minds of Koreans were deeply rooted. The recession had greatly affected their lives. Most of the investors lost their investment moneys and they had no way to continue on their lives. No supplies or money were given to them but only harsh consequences. To prevent any future Financial Crisis, the government of South Korea should have a way to block and resist it from occurring before hand. For example, controlling the investments rate, keeping track of the risks that they might face and the stability of all fund and investment managers. Furthermore, lending money only to reliable borrowers with high reputation. The recent Sub mortgage crisis started from lending to high-risk people who hadn't had the ability to pay their mortgages back. These are examples of what South Korea can do further in the future planning from now on to prevent recessions.
The consequence of the mistakes could have been much more devastating, nearly resulting state bankruptcy. Most of the experts didn’t expect any repayment from Korea in five years. Because the money lent was the largest amount ever, it seemed nearly impossible to pay back within ten years. The economy wasn’t healthy and those foreign banks were recruiting their money from South Korea. The cooperation of the government and its nation is truly what led to a faster recovery than expected. South Korea is now constructing stabilized fundamentals so that the economy won’t become drastic when it comes to economic recession again.
Genre #2 is a website. I created a website in the perspective of a bank in that(Korean Financial Crisis) period of time. It shows how desperate the banks were from any money withdrawal because they needed money. Most of the banks couldn't get their money back from the companies that borrowed millions of won. This genre helped to answer the question by perspective taking. While making the website, I had a better chance understanding the situation of the banks that needed money to recover. Through this genre, readers will have a better understanding of what the situations were like. GO VISIT BOSK (BANK OF SOUTH KOREA)
only text.. ABOUT
To all beloved customers,
Thank you for the endless support and respect for our bank.
For the last few months, all of the people in Korea was in great chaos. Many banks were vulnerable from such disasters over the past decade, but we were busy planning ahead, for a better investment, resulting a higher revenue. Bank of South Korea was undoubtedly predicted a bright future in Korea's economy.
However, as a CEO of the Bank of South Korea, we are deeply regretting what we have done for the past ten years. Despite of the hardship that we are experiencing right now, this really can be the turning point of our banking process and further provide a better service for the customers.
There is a quote saying, "Crisis, the upcoming opportunity." Bank of South Korea will use this crisis as a chance of developing our bank. We hope that the customers are also part of us, helping BOSK to flourish in the later days.
Once again, thank you for the support and BOSK will try its best to recover from the crisis as soon as possible. Thank you.
HOT ISSUE
South Korea Bailout
South Korea has received the largest amount of bailout ever in history from IMF. South Korea requested help to IMF and signed an agreement on december 3, 1997 that South Korea will be under IMF's economic restrictions.
Under IMF's Control
It is said that South Korea will be under IMF's bankruptcy program. It is undetermined of what the IMF bankruptcy program will affect Korea's economy but Korea's economy will be safer. There are assumptions made that the program will open foreign market to South Korea for much more liquidity economy.
GUIDELINES
Apologies to all the customers
To all customers, we are sorry to convey this message to you. As everyone know, the economy right now is really bad due to the big debt that S. Korea owes to International Monetary Fund. Starting from 1970s, most of the Asian countries were developing rapidly, including S. Korea. However, near the 1997, the economy started to decline and all the investments are not necessarily successful at this point. We deeply apologize for not being a trustworthy place for the customers to keep the money safe. We are deeply regretting of our highly optimistic view of our nation's economy. Our company, greatly encourage the customers to resist their will to withdraw the money kept in our bank. We are trying our best to provide what the customers want.
On the behalf of all, Joshua Kim
Interpretation.
Joshua Kim, myself, the CEO of BOSK (Bank of South Korea) is not too much worried about the recession. Governments are helping to repay the dept to IMF (International Monetary Fund) and importantly and thankfully the citizens are helping to recover from the recession much faster. So we encourage our customers to not lose any trust BOSK and keep the capitals/money in their account. Withdrawal of those money will only worsen the situation. In this situation, keeping the money in the bank account will be the only advice.
Q&A
How are you viewing the economy right now in South Korea?
We are very unstable and it is not a good time for an investment. The government is trying to recover as soon as possible from the recession. Over the 10 years, we have expected too much from the economy. The boosting economy with high interest rate was exciting the world in such development. All the world were assuming that South East Asian countries will become stronger and stronger dominating the world economy. The south East Asian countries were expected to build up influences like the United States. However, due to the fall of Asian economy, it seems like it is not possible for the dream come true for a few decades.
What has caused the recession?
When the economy was booming, everyone was delighted of the development of South Korea. The stock market were going over its limits. Investors didn't know the word 'Failure,' people thought nothing could stop the development. Nonetheless, that wasn't the truth. The actions that the Koreans were making built up for the big consequence of risky investments. Companies made tremendous amount of investments, pretty much assuming the success of such business. They borrowed money from the government and they truly believed that even though they fail, the government will recompense their money lost for the vast development.
What is happening right now?
There are many campaigns planned out to pay the debt as soon as possible. Those campaigns promoted by the government are collecting golds, buying domestic products and practice the "Anabada" campaign. Banking managers from BOSK is expecting an efficient profit by these healthy, fresh campaigns. South Korea is lack of dollars at this point so that they borrowed money from IMF. Because this is the case, the government is trying to collect golds from the citizens so that they sell and receive dollars. Through buying domestic products, that will help our own companies to actually continue its business through the crisis. By buying domestic products, it will also allow more jobs for unemployed people. Lastly, Anabada campaign is for saving our resources so that we don't waste any money on unnecessary goods. The three major campaigns planned out for the future of South Korea is expected to succeed but doubting if it will effectively help our economy. Works Cited
"Global Financial Crisis | East Asia Forum." East Asia Forum. 25 Oct. 2009 <http://www.eastasiaforum.org/tag/global-financial-crisis/>.
"IMF Upgrades South Korea Economy Forecast - South Korea * Asia * News * Story - CNBC.com." Stock Market News, Business News, Financial, Earnings, World Market News and Information - CNBC.com. 25 Oct. 2009 <http://www.cnbc.com/id/32350802>.
Genre #3 is a radio podcast. I acted as if I were the person in 1997 who lost his job due to the bankruptcy of the company. I explain how things proceeded until how South Korea has payed all of its debt in 2001. This will give the reader a better understanding of what people would have been like in this period. This genre helped to answer my question through perspective taking like genre #2. However, this time, I recorded my voice to show more dynamics of the emotions in that role.
Script:
Today, we will listen to Joshua's miserable story during the Korean financial crisis.
September 12, 1997. It was a bright sunny day. All seemed going well, and as usual, I was on my way to my job. I was an ordinary officer working for Halla.
My job was to survey the market and find a way to get people's attention in our products.
My payments weren't low, I drove a Lexus, which i bought a year ago. I was very stabilized at that time and I had a family.
However, when I was driving, I received a phone call. it was my boss. I was very shocked from what the boss had told me. I was fired..... I couldn't believe what he told me because it was all so sudden. He explained that the company itself was bankrupted. He didn't even give me a further explanation. I was totally confuse
I asked myself, How am I going to get another job? How am I going to feed my family? How am I telling this situation to my parents?
Now 12 years have past, and now I regret. It was all my fault. It was me, who caused the bankruptcy.
I urged the company to invest in sectors that were boosting dramatically. I was 100% sure that the investment will lead to a success. Because all of the people were doing the same thing. I told myself that it must have been approved to be a good place to invest money.
Our company borrowed money from many other banks in and out of South Korea. We invested all the money.
However, when it was time to pay the loans, our company had nothing left. that was the truth. At that time, the boss didn't tell me about the situation. I don't know why, but he didn't.
Soon, companies like ours were abundant, and they were all bankrupt. Then the foreign banks that lent money to Korea wanted their money back, recollecting all the dollars.
However, Korean banks didn't have enough dollars to pay back all the debts that they owed to foreign banks.
Therefore, they requested 55billion dollar bailout from IMF.
After using the money that Korea has borrowed, the time had come for them to pay back the debt.
To pay back the enormous amount of debt, citizens, including me, promoted campaigns.
I started collecting all the golds from our house to give it to the government so that they can sell the gold and receive dollars.
In addition, our family only bought domestic products. Through buying domestic products, it helped our companies to pay their own debts and make profit.
On August 27, 2001, South Korea finally payed all their debt to IMF.
By that time, I found a new job. I made my own company for clothes. With the development of internet, i used online shopping system to sell the clothes. After the crisis, many internet-based companies were established.
Unfortunately, I was again, the target of another crisis, the dot.com bubble.
Epilogue.
This project had taught me many new concepts in economy. Economy is not a simple subject that can be learned in a short time of period. Last year, I wrote about the Sub-prime Mortgage Crisis. I think I became more informed of economic situations in crisis and the relationship between companies, banks, government, and the citizens. If I read something about Korean Financial Crisis on a newspaper, I was very confused by all the terms that were used, but by researching in depth of this topic really helped me to understand what situations were people under in 1997. This project also changed my view on the Korean spirit. As I researched my topic, if it wasn't the power of the citizens doing all the campaigns, South Korea couldn't have payed the loan in three years. From my project, I hope people clearly learn the cause and effect of Korean Financial Crisis. Moreover, I want people to recognize the Korean spirit that has helped dramatically in S. Korea's economy.
What was the cause and effect of the Korean Financial Crisis in 1997?
Preface.
Table of Contents
My key research question is 'What was the cause and effect of the Korean Financial Crisis in 1997?' This question binds the project all together by explaining the cause and effects in various point of views. Even though the Korean Financial Crisis occurred approximately twelve years ago, it is still a hot issue among people who studies economy. I, myself was also very interested in this topic as it was mentioned very often in newspaper, and broadcasting news. Since the topic itself is very hard and complex, I tried to break it down in to many sequences in genre 1, so that the reader can easily interpret what really happened. Through genre 2 and 3, the topic is discussed in Bank's and an ordinary citizen's perspective so it is much easier to comprehend. This question is not necessarily important to me, but it is a very interesting topic to discuss.Genre Number 1: Research Paper
Genre #1 is a research paper. This genre helped me the most to know my answer to the key question, because it was a research paper. Through researching, I found new facts and information about the Korean Financial Crisis. The research paper also helped me to understand what caused the crisis and the effects.During the late 20th century, Asian countries have shown one of the tremendous growths rate in the world until 1997. Hong Kong, Singapore, Indonesia, South Korea were one of the major nations going through rapid economic growth. However, in 1997, these countries faced the most severe financial crisis which halted their economic growth. The crisis is known as the Asian Financial Crisis and also, “IMF Crisis” to majority of South Koreans. The crisis was truly unforgettable for the commoners, causing hardship maintaining their economic status. It has left painful scars in Koreans' memory. Nonetheless, the recession didn't continue for a long time. Although the South Korea's economy was severely damaged from excessive investments, South Korea had recovered dramatically fast through tough works done by the government and citizens.
So, what exactly is the Korean Financial Crisis? Right before the Korean Financial Crisis, economic growth in South Korea had continued for a long time, indicating that Korea will be the major power in East Asia, following the path of Japan. The annual growth for the first half of 1990s was 7.7%, exceeding the average of other nations. (Cavalio The Global Observer) Nonetheless, the little, mere mistakes that were made by the sectors have led the whole country go in to economic recession. Despite of many assumptions made about the cause of financial crisis in Korea, excessive investment is the most popular theory between experts. South Korea's highly leveraged firms and citizens were highly anticipating the success of the economy. (Mc Leod and Garnaut 66) They were too optimistic. The statistics were showing good results and foreshadowing further development in Korea.
The ratio of investment to saving was higher than most of the other countries out of East Asia.(Mc Leod and Garnaut 66) While the investment ratio was high, the sudden halt of growth greatly impacted the citizens, firms and government. (Mc Leod and Garnaut 66) All the money and capitals that were invested in certain sectors, stocks and funds were starting their downfall. The vast money had vanished in a second. All the money that companies and government were providing for the investments were mostly from loans. (Cavalio The Global Observer) The sudden halt of growth resulted in failure of investments and increasing liabilities. South Korea suddenly became the top country with the most debt in such a short time of period. The top thirty companies were bankrupt and this led to a much more serious problem. Observing the situation of South Korea, foreign banks and funds were now requiring for the money that they have lent to them. South Korea-lack of dollars-requested IMF (International Monetary Fund) for a help to rescue them from the high debt. This was basically what happened during 1997 to 1998.
The effects were severe. IMF had lent South Korea, approximately $55 billion. Now that South Korea has borrowed money from IMF, they had to pay back the debt. The stages paying back the debts and liability showed the true Korean spirit which shocked the world. There were 34.9 million citizens participated in collecting golds. (Kim Seoul Newspaper) After they collected the golds, they exported to other countries and received vast amount of dollars. Furthermore, the government promoted the 'Anabada', which means that citizens should use the product with care, then share and exchange the product with other people, and finally recycle the product. It was a promotion of recycling and make people not to waste money. People also tried to buy their own nation’s products which helped the companies in Korea to earn profits. (Kim Seoul Newspaper). The government also did a hard work trying to provide jobs as many as possible. By creating jobs, it was an opportunity for the people who lost their jobs when the companies were bankrupt. The government also inhibited systems and programs that halted companies from autonomous business.
The scars that the financial crisis has left behind to the minds of Koreans were deeply rooted. The recession had greatly affected their lives. Most of the investors lost their investment moneys and they had no way to continue on their lives. No supplies or money were given to them but only harsh consequences. To prevent any future Financial Crisis, the government of South Korea should have a way to block and resist it from occurring before hand. For example, controlling the investments rate, keeping track of the risks that they might face and the stability of all fund and investment managers. Furthermore, lending money only to reliable borrowers with high reputation. The recent Sub mortgage crisis started from lending to high-risk people who hadn't had the ability to pay their mortgages back. These are examples of what South Korea can do further in the future planning from now on to prevent recessions.
The consequence of the mistakes could have been much more devastating, nearly resulting state bankruptcy. Most of the experts didn’t expect any repayment from Korea in five years. Because the money lent was the largest amount ever, it seemed nearly impossible to pay back within ten years. The economy wasn’t healthy and those foreign banks were recruiting their money from South Korea. The cooperation of the government and its nation is truly what led to a faster recovery than expected. South Korea is now constructing stabilized fundamentals so that the economy won’t become drastic when it comes to economic recession again.
Works Cited
“BBC News | Business | South Korea seeking IMF help for financial crisis.” BBC. 27 Aug 2009 <http://news.bbc.co.uk/2/hi/business/33515.stm>.
Cavallo F. “The Global Observer - Forbes.com.” 30 Aug 2009 <http://www.forbes.com/global/1999/0614/0212016a.html>.
Mcleod, Ross H., and Ross Garnaut, eds. East Asia in Crisis: From Being a Miracle to Needing One?. London: Routledge, 1998. Questia. 8 Sept. 2009 <http://www.questiaschool.com/PM.qst?a=o&d=104107855>.
Kim, Minhee. “[서울신문] ‘국채보상·금모으기’ 온국민 한마음….” Seoul Newspaper. 17 Sep 2009 <http://www.seoul.co.kr/news/newsView.php?id=20090717057001
Genre Number 2: Making a Website
Genre #2 is a website. I created a website in the perspective of a bank in that(Korean Financial Crisis) period of time. It shows how desperate the banks were from any money withdrawal because they needed money. Most of the banks couldn't get their money back from the companies that borrowed millions of won. This genre helped to answer the question by perspective taking. While making the website, I had a better chance understanding the situation of the banks that needed money to recover. Through this genre, readers will have a better understanding of what the situations were like.GO VISIT BOSK (BANK OF SOUTH KOREA)
only text..
ABOUT
To all beloved customers,
Thank you for the endless support and respect for our bank.
For the last few months, all of the people in Korea was in great chaos. Many banks were vulnerable from such disasters over the past decade, but we were busy planning ahead, for a better investment, resulting a higher revenue. Bank of South Korea was undoubtedly predicted a bright future in Korea's economy.
However, as a CEO of the Bank of South Korea, we are deeply regretting what we have done for the past ten years. Despite of the hardship that we are experiencing right now, this really can be the turning point of our banking process and further provide a better service for the customers.
There is a quote saying, "Crisis, the upcoming opportunity." Bank of South Korea will use this crisis as a chance of developing our bank. We hope that the customers are also part of us, helping BOSK to flourish in the later days.
Once again, thank you for the support and BOSK will try its best to recover from the crisis as soon as possible. Thank you.
HOT ISSUE
South Korea Bailout
South Korea has received the largest amount of bailout ever in history from IMF. South Korea requested help to IMF and signed an agreement on december 3, 1997 that South Korea will be under IMF's economic restrictions.
Under IMF's Control
It is said that South Korea will be under IMF's bankruptcy program. It is undetermined of what the IMF bankruptcy program will affect Korea's economy but Korea's economy will be safer. There are assumptions made that the program will open foreign market to South Korea for much more liquidity economy.
GUIDELINES
Apologies to all the customers
To all customers, we are sorry to convey this message to you. As everyone know, the economy right now is really bad due to the big debt that S. Korea owes to International Monetary Fund. Starting from 1970s, most of the Asian countries were developing rapidly, including S. Korea. However, near the 1997, the economy started to decline and all the investments are not necessarily successful at this point. We deeply apologize for not being a trustworthy place for the customers to keep the money safe. We are deeply regretting of our highly optimistic view of our nation's economy. Our company, greatly encourage the customers to resist their will to withdraw the money kept in our bank. We are trying our best to provide what the customers want.
On the behalf of all, Joshua Kim
Interpretation.
Joshua Kim, myself, the CEO of BOSK (Bank of South Korea) is not too much worried about the recession. Governments are helping to repay the dept to IMF (International Monetary Fund) and importantly and thankfully the citizens are helping to recover from the recession much faster. So we encourage our customers to not lose any trust BOSK and keep the capitals/money in their account. Withdrawal of those money will only worsen the situation. In this situation, keeping the money in the bank account will be the only advice.
Q&A
How are you viewing the economy right now in South Korea?
We are very unstable and it is not a good time for an investment. The government is trying to recover as soon as possible from the recession. Over the 10 years, we have expected too much from the economy. The boosting economy with high interest rate was exciting the world in such development. All the world were assuming that South East Asian countries will become stronger and stronger dominating the world economy. The south East Asian countries were expected to build up influences like the United States. However, due to the fall of Asian economy, it seems like it is not possible for the dream come true for a few decades.
What has caused the recession?
When the economy was booming, everyone was delighted of the development of South Korea. The stock market were going over its limits. Investors didn't know the word 'Failure,' people thought nothing could stop the development. Nonetheless, that wasn't the truth. The actions that the Koreans were making built up for the big consequence of risky investments. Companies made tremendous amount of investments, pretty much assuming the success of such business. They borrowed money from the government and they truly believed that even though they fail, the government will recompense their money lost for the vast development.
What is happening right now?
There are many campaigns planned out to pay the debt as soon as possible. Those campaigns promoted by the government are collecting golds, buying domestic products and practice the "Anabada" campaign. Banking managers from BOSK is expecting an efficient profit by these healthy, fresh campaigns. South Korea is lack of dollars at this point so that they borrowed money from IMF. Because this is the case, the government is trying to collect golds from the citizens so that they sell and receive dollars. Through buying domestic products, that will help our own companies to actually continue its business through the crisis. By buying domestic products, it will also allow more jobs for unemployed people. Lastly, Anabada campaign is for saving our resources so that we don't waste any money on unnecessary goods. The three major campaigns planned out for the future of South Korea is expected to succeed but doubting if it will effectively help our economy.
Works Cited
"Global Financial Crisis | East Asia Forum." East Asia Forum. 25 Oct. 2009 <http://www.eastasiaforum.org/tag/global-financial-crisis/>.
"IMF Upgrades South Korea Economy Forecast - South Korea * Asia * News * Story - CNBC.com." Stock Market News, Business News, Financial, Earnings, World Market News and Information - CNBC.com. 25 Oct. 2009 <http://www.cnbc.com/id/32350802>.
"Kim Dae Jung Biography - Kim Dae Jung Childhood, lifeline, Timeline." Famous People - Famous People in History, Famous People List & Biography. 25 Oct. 2009 <http://www.thefamouspeople.com/profiles/kim-dae-jung-52.php>.
Genre Number 3: Radio Podcast
Genre #3 is a radio podcast. I acted as if I were the person in 1997 who lost his job due to the bankruptcy of the company. I explain how things proceeded until how South Korea has payed all of its debt in 2001. This will give the reader a better understanding of what people would have been like in this period. This genre helped to answer my question through perspective taking like genre #2. However, this time, I recorded my voice to show more dynamics of the emotions in that role.Script:
Today, we will listen to Joshua's miserable story during the Korean financial crisis.
September 12, 1997. It was a bright sunny day. All seemed going well, and as usual, I was on my way to my job. I was an ordinary officer working for Halla.
My job was to survey the market and find a way to get people's attention in our products.
My payments weren't low, I drove a Lexus, which i bought a year ago. I was very stabilized at that time and I had a family.
However, when I was driving, I received a phone call. it was my boss. I was very shocked from what the boss had told me. I was fired..... I couldn't believe what he told me because it was all so sudden. He explained that the company itself was bankrupted. He didn't even give me a further explanation. I was totally confuse
I asked myself, How am I going to get another job? How am I going to feed my family? How am I telling this situation to my parents?
Now 12 years have past, and now I regret. It was all my fault. It was me, who caused the bankruptcy.
I urged the company to invest in sectors that were boosting dramatically. I was 100% sure that the investment will lead to a success. Because all of the people were doing the same thing. I told myself that it must have been approved to be a good place to invest money.
Our company borrowed money from many other banks in and out of South Korea. We invested all the money.
However, when it was time to pay the loans, our company had nothing left. that was the truth. At that time, the boss didn't tell me about the situation. I don't know why, but he didn't.
Soon, companies like ours were abundant, and they were all bankrupt. Then the foreign banks that lent money to Korea wanted their money back, recollecting all the dollars.
However, Korean banks didn't have enough dollars to pay back all the debts that they owed to foreign banks.
Therefore, they requested 55billion dollar bailout from IMF.
After using the money that Korea has borrowed, the time had come for them to pay back the debt.
To pay back the enormous amount of debt, citizens, including me, promoted campaigns.
I started collecting all the golds from our house to give it to the government so that they can sell the gold and receive dollars.
In addition, our family only bought domestic products. Through buying domestic products, it helped our companies to pay their own debts and make profit.
On August 27, 2001, South Korea finally payed all their debt to IMF.
By that time, I found a new job. I made my own company for clothes. With the development of internet, i used online shopping system to sell the clothes. After the crisis, many internet-based companies were established.
Unfortunately, I was again, the target of another crisis, the dot.com bubble.
Epilogue.
This project had taught me many new concepts in economy. Economy is not a simple subject that can be learned in a short time of period. Last year, I wrote about the Sub-prime Mortgage Crisis. I think I became more informed of economic situations in crisis and the relationship between companies, banks, government, and the citizens. If I read something about Korean Financial Crisis on a newspaper, I was very confused by all the terms that were used, but by researching in depth of this topic really helped me to understand what situations were people under in 1997. This project also changed my view on the Korean spirit. As I researched my topic, if it wasn't the power of the citizens doing all the campaigns, South Korea couldn't have payed the loan in three years. From my project, I hope people clearly learn the cause and effect of Korean Financial Crisis. Moreover, I want people to recognize the Korean spirit that has helped dramatically in S. Korea's economy.